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There has been a long-term effort by the Republican party to shrink government, the core of which is often called "starve the beast"[1]. The idea is that by cut

by kemayo 6y ago

There has been a long-term effort by the Republican party to shrink government, the core of which is often called "starve the beast"[1]. The idea is that by cutting the revenue of the government, it will have to reduce spending on things like, say, a national high-speed rail system. So, yeah, regardless of how you feel about the goal, I don't think it's unfair to say that trillions of dollars in US taxation and spending were chosen primarily for their rhetorical effect. Being able to say "but we can't afford that!" was a top goal in recent tax policy. [1]: https://en.wikipedia.org/wiki/Starve_the_beast https://en.wikipedia.org/wiki/Starve_the_beast

fennecfoxen 6y ago
How curious. Well. I did some basic math. The figures I found online indicate that the 2017 tax cuts reduced total revenues in 2018 from forecasts, by about $275 billion. The June 2020 deficit was, as noted, $864 billion in a single month. This suggests that the added revenue from restoring taxes to "where they were" would pay for June's deficit over the next ~4 years — well, three and a bit, and you have to account for the revenue drop in a crisis. This is, of course, on top of the $779 billion deficit in 2018 and the $984 billion deficit in 2019. And, of course, there are multiple months in 2020. I think the general point stands, unless you're going to raise taxes VERY high or go full "money printer go brr" perhaps?
- kemayo 6y ago
  Depends on where the earlier commenter meant when they said "where they were"; the 2017 cuts were just the latest in a long line. For instance, if we rolled all the way back past Reagan's 1981 tax cuts, we'd be up to a 70% top marginal tax rate (it's currently 37%). They also wanted to cut military spending, which has gone up by a fair bit in the same time period, and meddle with corporate taxes. It's probably fair to say that all this would have a big impact on that deficit. It's unlikely to cover the 2020 economic-crash monthly deficit, of course... but hard times are the right time to go full deficit-spending to try to prop up the economy. Money printer can, indeed, go brr if it'll slow a collapse. So says mainstream economic theory.

by kemayo 6y ago

fennecfoxen 6y ago

How curious. Well. I did some basic math. The figures I found online indicate that the 2017 tax cuts reduced total revenues in 2018 from forecasts, by about $275 billion. The June 2020 deficit was, as noted, $864 billion in a single month. This suggests that the added revenue from restoring taxes to "where they were" would pay for June's deficit over the next ~4 years — well, three and a bit, and you have to account for the revenue drop in a crisis. This is, of course, on top of the $779 billion deficit in 2018 and the $984 billion deficit in 2019. And, of course, there are multiple months in 2020. I think the general point stands, unless you're going to raise taxes VERY high or go full "money printer go brr" perhaps?

kemayo 6y ago
Depends on where the earlier commenter meant when they said "where they were"; the 2017 cuts were just the latest in a long line. For instance, if we rolled all the way back past Reagan's 1981 tax cuts, we'd be up to a 70% top marginal tax rate (it's currently 37%). They also wanted to cut military spending, which has gone up by a fair bit in the same time period, and meddle with corporate taxes. It's probably fair to say that all this would have a big impact on that deficit. It's unlikely to cover the 2020 economic-crash monthly deficit, of course... but hard times are the right time to go full deficit-spending to try to prop up the economy. Money printer can, indeed, go brr if it'll slow a collapse. So says mainstream economic theory.